Abstract
Hydrometeorological phenomena have increased in intensity and frequency in last decades, with Europe as one of the most affected areas. This accounts for considerable economic losses in the region. Regional adaptation strategies for costs minimization require a comprehensive assessment of the disasters' economic impacts at a multiple-region scale. This article adapts the flood footprint method for multiple-region assessment of total economic impact and applies it to the 2009 Central European Floods event. The flood footprint is an impact accounting framework based on the input-output methodology to economically assess the physical damage (direct) and production shortfalls (indirect) within a region and wider economic networks, caused by a climate disaster. Here, the model is extended through the capital matrix, to enable diverse recovery strategies. According to the results, indirect losses represent a considerable proportion of the total costs of a natural disaster, and most of them occur in nonhighly directly impacted industries. For the 2009 Central European Floods, the indirect losses represent 65% out of total, and 70% of it comes from four industries: business services, manufacture general, construction, and commerce. Additionally, results show that more industrialized economies would suffer more indirect losses than less-industrialized ones, in spite of being less vulnerable to direct shocks. This may link to their specific economic structures of high capital-intensity and strong interindustrial linkages.
Highlights
The threats imposed by climate change on society have raised alarm all over the world
The first conclusion is that indirect losses constitute a major part of the total flood footprint
For the 2009 Central European Floods, the indirect losses represent around 65% of the total losses, which is consistent with the results of previous IO-based studies and provides the upper bound among those of other models
Summary
The threats imposed by climate change on society have raised alarm all over the world. Europe has been harmed by meteorological and hydrological events, including floods and windstorms These threats necessitate adaptation strategies capable “[of] responding to current and future climate change impacts and vulnerabilities . In this regard, Okuyama and Santos (2014) point out the pertinence of macroeconomic models for impact appraisal of natural disasters, such as the Input-Output (IO) model, computable general equilibrium (CGE) model, social account matrices, and macroeconometric models In spite of their subjacent constraints, those models are reliable in providing an overview of losses from catastrophic events, and assisting decision making for planning of risk management strategies. We innovatively incorporate a “capital matrix,” a concept traditionally used in dynamic IO analysis (Miller & Blair, 2009), with an attempt to translate capital reconstruction in the disaster aftermath into growth of productive capacity More details in this regard will be introduced in the methodology part (Subsection 3.3.3 called “Capital Matrix”). The results can contribute to deeper understanding of vulnerabilities and risk hotspots across different regions and economic sectors in Europe, assisting in the development of ad hoc adaptation strategies
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